As more investors warm up to the idea of cryptocurrencies, cybercriminals are adapting age-old fraud schemes to exploit them.
“Pump-and-dump schemes long pre-date the invention of virtual currencies, and typically conjure the image of penny stock boiler rooms, but customers should know that these frauds have evolved and are prevalent online,” the CFTC said. “Even experienced investors can become targets of professional fraudsters who are experts at deploying seemingly credible information in an attempt to deceive.”
Pump-and-dump schemes involve coordinated efforts among a group to “pump” up fake demand by buying shares and then sell them quickly for a profit, leaving traders unaware of the plan left with currency valued at a much lesser price than expected.
According to the CFTC, this type of market manipulation occurs in the “largely unregulated cash market for virtual currencies and digital tokens, and typically on platforms that offer a wide array of coin pairings for traders to buy and sell.”
Read more at:
www.foxbusiness.com/markets/2018/02/16/heres-how-cybercriminals-are-exploiting-digital-currency-investors.html
